The credit card industry is extremely competitive and offers many incentives to encourage new customers to sign up…

These incentives include things like free airline miles, free hotel rooms, a percentage of cash back from all purchases, and sign up bonuses. These rewards are a major selling point for customers, and many times the main reason for choosing one card over another. Unfortunately, many of these incentives come with restrictions and fine print make them not worth the application form they are printed on.

Here is an unbiased list of the top reward cards:

Cash Back Cards

Credit cards that reward cash, typically have “2 major problems”. The circumstances in which a customer will receive cash back, are usually very limited. And secondly, the amount of cash back monthly is usually “capped”. These two things will limit the benefits you can receive from this type of card.

Many cards advertise as much as 5% cash back, but these are only for limited types of purchases such as groceries or gas.

One card was particularly confusing, offering 5% cash back, but capping it at 75$ per quarter! Another card made similar promises, but capped the return at only $40. This is a blatant attempt to trick customers.

The American Express Plum Card

Fortunately there are some great cash back cards, without the caps and with the restrictions. The American Express Plum card gives 1 1/2% (formerly 2%) back on all purchases, with NO cap. This card is particularly good for businesses, as its use to pay for costs such as advertising, office supplies, and other business expenses, allows for a significant buildup of funds each month. This card also allows businesses to defer payment for up to 2 months, without penalty. Which is great for businesses that can sometimes run into cash flow problems. In order to be eligible for cash back with the plum card, a customer has to pay within 10 days. This is extremely easy to do as American Express has a very good system for online and over-the-phone bill payment.

The customer service for this card (and American Express in general) is excellent. Compared to the customer service of many other credit card companies, the service representatives were very helpful, available 24 hours a day, and all spoke very good english. With some card companies, this can be a major problem. Being connected with a representative that is fully fluent in english or helpful, is not typical with many other major credit card companies. Online payment is a very simple and painless process. The card also comes with free roadside assistance, extended warranty, and purchase protection.

The annual fee for the Plum Card is a little high at $185, but with a high monthly spend, you will most likely make that and more back.

Airline and Hotel Rewards

Free airline miles and hotel stays are usually the most popular type of reward that credit card companies can offer. One of the best cards for frequent flyers and travelers is the Starwood American Express Card. This cards allows customers to earn 1 point for every dollar that is spent.

Most cards that allow customers accumulate airline miles have blackout dates, restrictions, and caps. The Starwood card is one of the best in this area and allows for points can be redeemed and used by 30 major airlines. the restrictions are minimal, so customers aren’t getting tricked into thinking they are getting a better deal than they actually are.

The Starwood Card comes with great customer service that American Express is well-known for. It does have an annual fee, but it is pretty minimal at $65. It’s APR is average at around 15%. But, if you’ve never carried a balance, this won’t be a huge factor in your decision.

Sign up Bonuses

Some cards offer cash sign up bonuses, or free airline points simply for signing up. They do often require you to spend a certain amount in a limited time to qualify for these points. As far as free bonus incentives, the Starwood Amex is among the best. It allowed customers to instantly receive over 30,000 point once they spent over $4500 with the card. These point have very little restrictions and can be used with most major airlines and hotels. If you tend to travel often, for work or fun, this is a card, you should look at closely.

If you are looking strictly for a cash back card, with sign up incentive the Chase Freedom Visa may be a good choice. It gives a $200 sign up bonus, once the user spends $500 in the first six months. After that it allows 1% cash-back on all purchases. This might be a good choice for customers that don’t qualify for the 1 1/2% cash back Plum Card.

For travel rewards, The American Express Premier Rewards card gives over 15,000 points to new customers, once they have spent over $1000. These points can be redeemed for cash or used for airline miles. This is a charge card, so there is no APR, but there is a late payment penalty. Certain types of purchases can earn you 3 times the normal amount of points (which is $1 spent = 1 point). One negative to this card is the annual fee is is higher than typical, at $175 per year.

Watch Out For Fine Print

The are many rewards cards, but many are very restrictive and have fine print that can easily negate their benefits. Before you sign up for any card, read all the terms and conditions you will need to follow to redeem them. Rewards and points are meaningless if they aren’t easily redeemable.

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If you have unpaid debt, a collection agency may be hired to retrieve that money for the collector…

Debt collectors use a variety of tactics to extract payment from a debtor including: persistence, pressure, intimidation, and the debtor’s lack of knowledge about their own rights. If you, as a debtor, feel that you have been unlawfully harassed, the best defense is to learn what rights the Fair Debt Collection Practices Act allows you.

Many debt collectors get paid based on commission and have an incentive to retrieve a debt “by any means necessary”. Under the FDCPA, debtors can stop all collector contact with a “cease and desist letter”.

What is The Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act was set up in 1978 to stop abusive practices by some collectors in the industry. The FDCPA is a set of rules that all collectors must legally abide by, or risk getting sued for damages in court.

When a debt collectors contacts they must provide the following information:

1) The name of their company they work for

2) The exact amount of the debt that are claiming you owe

3) The name of the creditor seeking to recover the debt

4) A statement that gives the debtor 30 days to “dispute” the debt. If the consumer does dispute the debt, the collector must provide proof that the debt is owed.

Conditions under which you may want to dispute the debt:

1) If you believe you have paid the debt.

2) If you think the collector doesn’t have the correct amount.

3) if the statute of limitations has run out on your debt. (the SOL on debt varies based on type and the state you reside in)

How to Stop Debt Collection Calls

Debt collectors earn their commissions when they successfully retrieve money from a creditor. They are allowed to call and email you, but as the debtor, you have the ability to stop all contact by filing a dispute letter. If a collector continues to contact you after this letter has been recieved, they are breaking the law.

- You also have the right to hire an attorney to represent you concerning this debt. In this instance, the collector must do all business with your lawyer.

What Debt Collectors Cannot Do:

The collection industry is needed by business owners to help them collect outstanding debts. Collectors that work on commission may be overly aggressive in order to make money. Sometimes this drive to get the comission can cause collectors to push the boudries of the law under FDCPA.

Here is a list of things that collectors cannot do in order to collect a debt:

1) A collector is not allowed to threaten to call your employer or neighbors concerning your outstanding debts.

2) Collectors are not allowed to call you after the hours of 9:00pm or before 7:30 am.

3) They cannot make false threats of legal action

4) They cannot threaten you with arrest if you don’t pay the debt

5) They cannot try to collect more than the amount that you owe your creditor (including interest, late fees, etc)

How to Stop Collector Harassment

- If a collector crosses the line into territory that you believe is illegal, you have a range of options at your disposal. If this happens, you can:

1) Speak with a Supervisor - if you feel that an individual collector is violating your rights, you may want to speak with a supervisor concerning the collector’s actions. Violations are very common in this industry, so speaking with a manager may help diffuse the situation.

The supervisor may or may not be sympathetic to your situation.

2) Make Them Provide Proof – If the debt is disputed a collector is required to provide proof that this debt is owed.

3) Keep a Record of All Your Communications with the Collector – It is important to keep a record of all phone calls and communications with a collector, whether you are being harassed or not. If you feel that a collector has used illegal tactics in an to attempt to collect your debt, you may need documentation to prove it.

If you are being verbally harassed by a collector, you might even want to record the conversations to provide proof. You should also note that recording a phone call may or may not be legal in the state you live.

4) Make a Complaint to the FTC – The FTC is a government organization that was created to protect consumers. You have the right as a consumer to report any unlawful action to the FTC, in order to have it more thoroughly investigated.

5) Sue - If a collector persists in violating your right under the Fair Debt Collection Practices Act, you have the right to sue. But, this does not necessarily mean you will win, unless you have well documented proof. If you do win, you can collect damages for things like lost wages and attorney’s fees.

Even though a lawsuit might seem like a good option, legal action is a very expensive. It can often lead to a long, drawn out process that will cost you alot of time and money. Odds are that if you have outstanding debts that have been sent to collections, you may not be financially strong enough to handle these legal fees.

If you sue and win, you will still owe the outstanding debt. It may also escalate the situation with the original creditor. The creditor does have the right to sue you for the original outstanding debt.

6) Find Out If You Are Past The Statute of Limitations for Collection

Most consumers are also not aware that certain types of debt expire after a certain period of time. The statue of limitations on debt vary from state to state. It cab range from 3 – 15 years depending on the type of debt and the state you reside in.

Certain types of collectors called “debt scavengers”, may purchase an old debt that has long been past the statue of limitations. These “debt scavengers” often pay pennies on the dollar for the right to collect with debt and rely on the consumer’s naivety to collect it.

7) Report Them To the Better Business Bureau – companies often rely on their better business bureau to maintain their reputation as a trustworthy business. If you have been harassed, you can contact the BBB and lodge a complaint.

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Identity theft results when a person fraudulently uses credit card numbers, a social security number, or personal information to commit a crime. In certain cases like a stolen credit card, damages can very quickly reversed by credit card companies (even though businesses mar incur losses as a result). In other instances, ID theft can ruin a person’s credit history, cost them money in damages and legal fees, or in rare instances cause legal problems.

The number of cases of this type of crime has risen steadily over the last 10 years and may increase even more as our personal information pours onto social networks. More important transactions are taking place online, so our information has become increasingly more vulnerable.

In the near future, much of our personal files and information will be stored in the “cloud”. While this method of store our personal files is very convenient, it will create a security nightmare.

We are becoming more vulnerable to cyber crime, so precautions like identity theft insurance may become more necessary.

Consumers are starting to grasp how serious these issues are and businesses are look to fill that need with insurance and products to protect them.

Types of Identity Theft

I.D. theft isn’t only confined to credit card theft. It also includes unauthorized use of social security numbers and the use of a stolen identity to commit different types of crimes. These types of I.D. theft are much more rare and may not be covered in I.D. theft insurance policies. For example, thieves may try to obtain documents like a drivers license or identification with false information.

Credit Reports

The most cost effective way to prevent identity theft, is to check your credit report annually or bi-annually. The website annualcreditreport.com allows all U.S. consumers to access their own credit information, one time per year at no cost.

The cost to access the credit information from bureaus like Transunion, Equifax, and Experian can vary in price from $10.00 to $40.00, depending on the service. Some services allow access to reports from all 3 major bureaus, while other allow access to only 1. Other services provide a free credit report, if you sign up for a monthly credit monitoring service.

Credit Monitoring

This is a service that can help you more easily keep tabs on your credit data and quickly alert you to any instance of I.D. theft. The features of a monitoring service may include emails, phone calls, or text messages any time a new credit account is opened, an address is changed on your credit file, 24/7 access to your credit report, credit inquiries, and/or and change to your credit account.

Monitoring services range in price from $5-$30 per month and offer a variety of features. Some plans I.D. theft insurance as a bonus to their active monitoring.

The insurance can cover $10,000 to $1,000,000 in losses, but in some instances the coverage will be limited. If you do suffer a loss, there can be caps as to how much money you will receive for specific types of damages.

Limits on Coverage

All I.D. theft insurance plans have limitations on what will be covered. Lost wages, legal fees, loan application fees, and costs to obtain credit information are common types of coverage. The coverage of these different types of losses will be limited or capped in certain situations.

- For example, if the theft results in a $10,000 loss, you may not be able to recover the full $10,000 amount from your insurance company. Costs incurred by legal fees, or lost wages may be capped. If your loss cost more than this amount, you will not receive a full reimbursement.

Certain types of I.D. theft may not be covered including debit card or check fraud, social security number fraud, criminal I.D. theft, or medical I.D. theft. If you are serious about protecting yourself from this type of loss, usually the cheapest coverage isn’t adequate.

- Quality identity theft insurance does exists, but you will pay more to get good coverage.

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There are over 25 “major online brokers” which allow you to quickly trade stocks, mutual funds, and currencies…

Many of these sites come with a wealth of research materials and tools to visualize your investment strategies. The online broker market is extremely competitive and very saturated. This has driven the price per trade extremely low in the ast 5 years. In one case, we found trades at just $2.50 per transaction (at Just2Trade.com).

Brokerages can offer a variety of “investment types” that range from stocks to foreign currencies. A high quality broker should provide tools like virtual trading accounts, analyst research reports, and charts to help you visualize your strategies. These sites vary widely in costs, features, and educational materials. This article will explore the positives and negatives of online brokers, and point you to a company that fits your investment style.

Account Fees

Financial institutions are well known for hiding fees in fine print, and online brokers are “no exception”. Some brokerages were found to charge large fees for basic services such as mailing a paper statement or transferring an account to another broker.

Certain brokers also charged account maintenance or inactivity fees. Almost all of these services required a minimum deposit in order to obtain an account. These minimum deposits usually ranged from $500-$10000. ING had an investment account with no minimum deposit in order to get started.

Overall, most brokerages offered very small fees per trade, especially when compared to traditional brokers. The broker Just2Trade was found to have the lowest commission in the market at $2.50 per trade on stocks and mutual funds. Just2Trade requires users to have 2 or more years of experience in trading in order to open an account. (Although i’m not sure how they would verify this)

Types of Investments Offered

Brokerages also varied greatly in the types and number of investments offered. One of the best in this respect was Charles Schwab. Scwab offerd No-Load mutual funds from over 400 companies, with no transaction fees. Another site that scored well in this respect, was Fidelity with around 250 mutual fund to choose from.

Some online brokers specialized in certain areas like international investments and foreign currencies. Muriel Siebert allowed customers to access almost 50 exchanges throughout the world. Other sites like Vanguard also offered access to foreign exchanges and currencies.

Certain brokerages also had better access to IPO’s. Fidelity and Charles Schwab have signed deals with Deutche Bank and Goldman Sachs that allow their customers access to the stock before it is publicly traded. Although, not all accounts with these companies can access these IPO stocks. Certain rules like low funds in an account or lower numbers of trades per year, may prevent certain customers from gaining access.

Research Tools

One of the benefits of using an online broker is the access to free research materials from top research firms. Some, like Fidelity use example accounts to show the results of a particular strategy. For example, these accounts would reflect all recommended trades by a particular research firm. Fidelity was one of the best online brokers when it came to providing research materials and reports to customers. This material included research from top firms like Lehman Brothers and S&P, for no extra cost.

Other sites had stock rating systems and their own research teams. But, Fidelity seemed to allow customers the most in-depth research abilities.

Support

One of the best features of an online broker, compared to a traditional broker, was the cost. Many times this low cost comes at the expense of service. All major online brokers had phone and email support, but less than half offered 24 hour support. Some offered live chat, while others offered forums to communicate with other traders.

One company that ranked very well in terms of customer service was Scottrade. Customers not only had access to 24×7 call centers, they also had the ability to stop by local offices to speak with a representative. Scottrade currently has offices in almost every state in the U.S.

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Refinancing is a way that homeowners can “restructure” their mortgage debt to lower their monthly expenses…

Refinancing is a topic that is particularly important right now, due to the fact that interest rates are at a record low. As of Dec. 21st 2011, the interest rate for a 30 year fixed mortgage was hovering at around 3.5 – 3.9%. This is over 1% lower than when i checked rates just 2 years ago. At this time rates were fluctuating in the neighborhood of 5% – 5.25%. A 1% – 1.5% difference may not seem significant, but it adds up over the term of the loan. A 1% interest rate drop on a $250,000 loan, can lower your monthly mortgage payment by $150 and save you over $50,000 of the entire term of the loan. Right now, competition between lenders is fierce and some will even “pay you” for the chance to refi your loan and drop your rate.

Why are interest rates so low?

A weakened economy means that consumers are less likely to make purchases, and retailers are less likely to prosper. In an effort to stimulate economic growth and spending, the Federal Reserve lowers interest rates, allowing banks to borrow money at very low rates. Since banks are allowed to inexpensively borrow money, they are able to lend consumers money at lower rates. By refinancing your home loan, when interest rates are low, it is possible to lower a monthly mortgage payment, improve loan terms, or reduce the length of a home loan.

A homeowner may even be able to get money back from a refi. A relative of mine recently got paid $1000 to refinance their loan and drop his interest rate by a significant amount through Amerisave. This person lowered their monthly mortgage payment $200 and got paid $1000 to do it. It is not known how long rates will stay at these lows, but the federal reserve has plans to keep rates low until 2013. They most likely will fluctuate or rise before that time.

What are the negatives of a lowered interest rate?

When the Federal Reserve lowers rates, it can have some negative consequences. These consequences include lower returns on savings accounts, CDs, treasuries, and money market accounts. This type of investment is always a very safe place to put money, but the lower interest rate makes it more difficult to get a decent return.

When this happens, investors will begin to look to riskier places (like the stock market) to get a better returns on their stagnant money. The stock market has become very volitaile in the last few years, so this type of investment has become even riskier. This makes for a difficult environment as investors are unsure where to place their money to earn solid return. The lack of easy returns, tends to disincentivize consumers to save their money.

The low interest rates created by “the Fed” also tend to predict a higher cost of living and a rise in asset prices. Assets like fuel, food, and housing tend to increase in price in these market conditions. This rise in asset prices is not currently significant, as the demand for many types of goods have lowered.

Benefits of Refinancing

Due to the unusually low interest rates, mortgage companies are being particularly aggressive. In some cases, companies will even pay qualified borrowers to refinance with their company. It is important to check rates and refinance offers often, as they will fluctuate even throughout the day. To check rates, visit mortgage comparison sites like Amerisave.com. Search around as much as possible to make sure you pay the least amount in fees, get the lowest interest rate, and best terms.

Another benefit to refinancing is that you can keep the same monthly payment (if you feel comfortable with it), but shorten the term of your loan. More of the payment each month will go toward the principle, so the loan will be paid off more quickly.

Refinancing can also allow you to significantly reduce your monthly expenses. A 1% drop on a $250,000 loan can lower your mortgage payment by $150. It might not sound like much, but reducing monthly costs can help struggling homeowners stay afloat, if tough times hit.

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Due to the economic downswing in the U.S. and world abroad, a consumer’s access to new credit has become more limited…

A poor credit or payment history can make it significantly more difficult to get an “unsecured card” at a reasonable interest rate. The average rates for unsecured cards hover at around 15%, so any late payments can make a balance balloon very quickly. Unsecured cards allow users to enjoy the same conveniences and fast payments that come with any other credit card. The main difference between a “secured” and “unsecured” card is that users make a deposit equal to the credit limit they want for the card.

For example, if you wanted a $300 limit, you would first have to make a security deposit of $300. With a secured card, a statement is delivered at the end of the month and paid just like a traditional card. The original security deposit will only be used, in case of non-payment.

- A few benefits of secured cards are that most will report transactions back to the 3 main credit bureaus. Using this card will help improve your payment history and credit score. Not all companies that issue secured cards, will report to the bureaus.

- If you are applying for a secured card in order to fix a bad credit history, you need to be sure that the transactions are reported back to the bureaus.

Fees of Secured Credit Cards

One negative to secured cards are the fees that can be charged for things ranging from monthly maintenance, to ATM withdrawls, and customer support. Secured card charges can be minor or very significant. The fees vary greatly from card to card. Most secured cards have minimum security deposits that range from $200 to $500. So, before a deposit is made, a card holder should learn how the fee system works.

Secured Cards Help You Build Credit

Secured cards are often used to improve credit history. Transactions can be reported back to Equifax, Transunion, and Experian. With consistant use and “on time” payment over time, a poor credit score can significantly improve. Not all secured cards report to the bureaus, so make sure your company offers this feature, BEFORE you make a deposit.

- Responsible use of a secured card, can help a user eventually qualify for an unsecured card (if that is what they want). The average amount of time it takes for a user to qualify for an unsecured card is around 1 year.

Qualification

Since secured cards present little risk to creditor (due to the security deposit), most applications are approved. Many secured card issuers accept over 95% or applications.

Difference between Prepaid and Unsecured Cards

There is alot of confusion about the difference between prepaid cards and secured cards. Secured cards require a security deposit, while prepaid cards DO NOT. This deposit is only used in the case of non-payment. A paper or electronic bill is sent at the end of the month with secured cards.

A prepaid card on the other hand deducts each transaction from your account. The user can be sure that they will not overspend, because the money is taken out of their checking account. Some prepaid cards do offer “cash advances” or overdrafts. But this feature is generally one that consumers should avoid because the interest charged will be significant. Prepaid (or reloadable cards) can be used as an “alternative” to a checking account. Money can be deposited and removed, but the fees will be high than any bank account.

Where Should You Get a Secured Card?

Many banks and major credit card companies offer their own secured cards. If your credit is poor, it is usually not a problem in an application for this type of card. A good secured card should have low fees, a low minimum deposit, and credit bureau reporting.

A good secured card would include:

1) Orchard Bank Secure MasterCard – which has a low interest rate and a $35 annual fee. It also reports transactions back to the 3 credit bureaus.

2) Wells Fargo Secured Card – The interest rate for this card is around 15%, which is about average compared to unsecured cards. The annual fee is also very low at $18/yr.

- After you receive your card, you should start by only making the minimum deposit. Doing this will allow you to get started, so you can make sure the fees are not a problem. The security desposit will be refunded if you do not like the card for any reason.

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In the world of online currency trading, automated programs (or bots) have been successfully conducting trades for decades…

A wide array of forex programs advertise ”fool proof, money making systems” which can generate profit with little or no skill. Unfortunately, this advertising is deceiving at best. Most of these programs tend to work only temporarily, or not at all.

In comparison, major investment banking companies have the brightest programmers and engineers in the world, plus the capital needed to develop high tech trading programs that actually work. These resources give them the ability to change strategies and develop new systems as market conditions change.

A splitsecond advantage, in the world of high tech finance can mean the difference between a profit and a loss. Investment banking and finance companies spend millions of dollars to develop software that give their traders an advantage or the ability to pursue a strategies that manual traders would just not be able to handle. These bots help to remove human error out of a very high-stress fast-paced environment.

What Does Forex Trading Software Do?

Forex speculators make profits by taking advantage of currency fluctuations. Currency prices rise and fall very quickly, so manual traders may not be able to execute trades as quickly or with as much consistency as needed.

Automated trading programs have an advantage over human beings as they can evaluate trades very fast and remain consistent over time. They also allow traders to stick to certain strategies and avoid human weaknesses like fear and greed.

New technologies that are profitable, cost lots of time and money to develop! It only makes sense for a developer to sell a program, if they believe their strategy will not be profitable in the long term. Some automated programs do work without user intervention, but usually only for short time periods.

On the other hand, there is “huge demand” by novice investors for this kind of trading software. Developers can make alot of money selling products, software, and services to beginning investors looking to get a foothold in the market.

Automation + Experience

Trading programs can also be used in a “semi-automated” manner. This allows for fast trades, with the benefit of human oversight and experience. Investors may get into trouble if they rely on programs to do ALL the work, with zero work or research on their part.

Using programs in a semi-automated way, allow for certain parts of the trading process like stop-loss and take-profit orders to be automated, while oversight can be left up to the account holder. In this case, having experience and knowledge in the market, plus a bit of automation, can give you an advantage.

What is Scalping?

A trading technique commonly used by forex bots is called “scalping”. Scalping involves quickly buying and selling currencies in 1 to 5 minute time frames. This strategy can be done manually, but it is a repetitive task, that requires long hours and a low margin for error. This type of currency speculation can be risky, but scalpers lessen this risk by only holding their position for a short period of time, their exposure to risk is cut down.

Best Currency Pairs for Scalping - certain currency pairs may work more effectively with the scalping strategy than others. The EURUSD and GBPUSD are currencies which are traded most frequently and have high liquidity. Currency pairs like these are less reactive to news events. A news event or press release that may send the AUDJPY pair up 100 pips, will only move the EURUSD 30 or so pips.

Times of Day to Scalp – different times of the day require differing market strategies when trading currencies. During the period of 8:00-10:00 am Eastern time, news is released that affects the currency markets. A trader can anticipate the reaction and make trades to these news events that will cause fluctuations in currencies. As different exchanges come online around the world, traders need to adjust their strategies , since market conditions will change.

Trading Programs

Forex Crescendo – this program operates differently from many of the other forex bots. Most bots use an indicator strategy, while the Forex Crescendo software trades based on algorithms that react based on conditions in the market, instead of using past data to predict what will happen in the future. This strategy may be more effective today, due to volatile market conditions.

The account on the sales page of the software shows a reasonable 16% monthly gain. This bot made profitable trades over 75% of the time. The developer of the software, Andrea Salvatore is a mathematician and Forex trader. The program allows trades in 5 currency pairs: GBPUSD, GBPJPY, EURUSD, USDCHF and USDJPY. The types of strategies it uses include Compounding, Automatic avoiding, Entries filtering, trailing, and trend scores.

MegaDroid – This bot was released in 2009 and uses the scalping strategy. Megadroid only trades EURUSD, so if you want to use strategies with other types of currencies, this bot might not work for you. The program uses a system called “Reverse Correlated Time and Price Analysis” in which, charts and past events are used by the bot to predict future patterns where a trader can take advantage and make a profit.

The programmers of the Megadroid software state its trades aren’t visible to brokers. Brokers usually don’t like to work with automated bot traders, so this may be helpful. Mega droid has been shown to be profitable on live cash accounts, but it was developed in 2009 and may no longer be as effective as it was when it came out onto the market.

Some experts believe that scalping is a low risk compared to other currency trading strategies, because market exposure is short. Scalping certain patterns can be observed and traded manually or it can be automatically traded by the bot.

FapTurbo – This program is one of the original “mass marketed” forex trading bots. This program support multiple currencies, and the settings are customizable.

FAP is an acronym for “Forex Auto Pilot”, which some believe is the wrong attitude to take with forex. Forex contains risk, as do all other types of investments. Using a tool like this without any knowledge of currency trading will increase your risk. This bot does have the ability to make trades on a demo account, which allow you to test your strategies and get accustomed to trading.

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Penny stocks are defined as shares of a company that are a dollar or under in price. The term “penny stock” can also represent the total value of its outstanding shares (market cap). If a company has less than 10 million in assets, it would be considered a penny stock. One of the reasons that investors are interested in low cost, low market cap stocksis that their value can fluctuate heavily and create large gains or large losses. Since, small price movements create big gains or losses, theses stocks are very vulnerable to manipulation.

Pump and Dump Schemes

“Pumps and dump schemes” are a common type of fraud often seen with penny stocks. This type of stock manipulation has been occurring for the last 100 years, but recently has been enabled by the internet. These schemes occur when an owner or group of owners of a stock try to inflate the price, with recommendations, or false statements.

When the price of these penny stocks rise due to increased demand, the original “pumpers” sell all of their shares. Companies with a low market capitalization (less than 10 million in assets) are not required to file with the SEC. This may make these stock less prone to scrutiny or legal action due to fraud. A small increase in price can represent big profits for the initial buyers. It is very common for an individual or company to “pump” these stocks in email newsletters, social networks, or websites to inflate the price. Once the price has increased significantly, the people promoting it will sell off all of their holdings.

Penny Stock Newsletters

Pre-internet, brokers would use the phone to alert investors and drum up the interest in a particular stock. In 2011, email newsletters are the main ways that stocks are “pumped”. These newsletters usually cater to beginning investors, looking to learn the ropes. These subscribers are unwittingly the “targets” of these “pump and dump” schemes.

In this case, stock tip newsletters will promote a certain company as a new “hot stock”, and as buyers come on the price will increase. This initial price increase will lead to a surge of new buying and the price will creep up even further. Once the price has spiked up to a level that the pumpers are satisfied with, they will sell their shares for a profit.

One recent example of how a pump and dump would work via promotion on the internet is how the rapper “50 Cent” made millions promoting a penny stock called H & H Imports on his twitter account. He simply mentioned H & H Imports to his almost 4 million twitter followers.

He stated “HNHI is the stock symbol for TVG there launching 15 different products. they are no joke get in now.” In addition to 2 more tweets about the stock.

Before he tweeted, the stock price was $0.10. After the 3 tweets, the price rose up to $0.39 cents. In that short time span, investors of the stock would have quadrupled their investment. 50 cent made an estimated 11 million dollars on this activity (if he would have sold his shares at that time).

Usually this type of activity is considered illegal and prosecutable by the SEC. But, after the stock prices jumped dramatically, 50 cent did not “dump” the stock. If he had, he may well have had SEC investigators jumping down his throat. The SEC tends NOT to give high profile individuals preferential treatment (think Martha Stewart!).

Penny Stocks vs. Long Term Investments

Long terms stocks are bought when investors have a belief that a company will grow, and their investment will increase in value over time. Long term investors look for companies that have the potential to expand and increase profits. This is NOT true when it comes to most penny stock purchases.

Most companies with very low share prices, have significant problems on their books. Purchasers of low market cap stocks (or penny stocks) don’t necessarily believe in the company. They just believe that small increases in price of the stock will make them money.

- Penny stocks are often very attractive to beginning investors due to their low prices. This is another reason these stocks are easily manipulated. Uneducated investors get sucked in to purchases via a “hot stock tip”, but end up as victims of fraud.

Is There Money to Be Made in Penny Stocks?

Absolutely, but the mindset of penny stock investing and long-term growth investing is completely different. The price of low market caps stocks need to be watched closely as prices can fluctuate rapidly. Individuals that are not full time investors, may not have the time to execute the necessary trades throughout the day. Remember that these stocks are cheap for a reason. They often have major issues on their books, including negative earnings, management problems, and a possibility of bankruptcy.

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Commodities are goods that gain or reduce in value as supply and demand grows or lessens…

Types of commodities that can be traded include precious metals (gold, silver), energy (oil, natural gas) grains (corn, wheat), and even livestock. End users or investors purchase contracts that specify a price and date of delivery for these goods. Trading of commodities takes place on exchanges throughout the world. Exchanges in the U.S. that trade commodities include the Chicago Board of Trade and New York Mercantile Exchange.

Buyers and Sellers of Commodities

Sellers of ”goods” like corn, may be the farmer that grew it. It may also be a trader that is looking to resell their contract for corn at a specified price. Speculators can purchase these contract in the hopes that the price of coffee will increase, and they will make a profit.

A contract for a commodity describes the goods being sold, the quality of the goods, and the place they will be delivered. Unlike with “options trading”, where a purchase of a stock or bond is optional, commodity contracts require a buyer to purchase the full amount.

Investors are able to control a large amount of goods, usually for the margin of around 5%. For example, an investor can buy a contract for $10,000 of oil for just $500. But, when the contract is up, the investor is required to purchase the full amount.

Speculators can sell this contract at any time to an end buyer or to another speculator. In order to earn a profit, a speculator must successfully predict the supply and demand of a”good”. If the price of coffee increased, due to a restricted supply, a commodity speculator could sell the coffee to an end user like Starbucks, for a profit.

Researching Commodities

Researching commodities involves 2 type of research including fundamental analysis and technical analysis.

Fundamental Analysis – is focused on predicting supply and demand. The basic idea of analyzing supply vs. demand, in that if demand is greater than supply, prices will rise. Conversely, if the supply is greater than the demand, prices will fall.

- Analyzing supply, would include researching how much product is left over from the previous year and how much of a commodity will be generated in the current year.

Factors that can affect supply of a commodity include: weather, rates of discovery of commodities like gold, diseases that might reduce a crops yield, and new technologies that might lead to increased yields.

Demand is also affected by the current price of the commodity. As the price increases, demand will drop. On the other hand, if prices are low, consumption will increase and prices will eventually rise.

Some experts advise new commodity traders to look towards long term trends, because short term prices fluctuate heavily and can difficult to predict. Looking at long term trends in production, or use of a commodity may be a more accurate predictor of their future price.

For example, if coffee growers are producing record amounts of coffee, the prices will decrease. Once the price decreases enough, consumption will increase due to the lower cost of coffee.

Technical Analysis – this type of price prediction uses data like chart patterns, support and resistance lines, and moving averages to predict price changes in a commodity price. With technical analysis, traders often look to past trends, to predict future prices.

Using chart movement patterns, may be predictive of a bullish or bearish trend. Certain patterns may show indecision or fear in the market. This may be a time when sellers are more likely to sell a good for less than what it will be worth in the future. Determining whether a market is trending up or down is important to predict prices. Knowning whether there are more sellers or more buyers can tell you whether to buy or sell.

Leveraging

The ability to control a larger amounts of a commodity, for a small percetage of the total price is called leveraging. The “margin” is the percentage of money it takes to control a large amount of a commodity.

- For example, a trader could purchase a contract for 100 barrels of oil at the price of $500 (if oil sold at $100 a barrel and the margin was 5%). This has some negative implications for inexperienced traders. It allows trader to experience large gains or large losses, with the payment of a small “margin”. Unlike with options trading, a buyer has the obligation to purchase the good when the contract is up. The contract can also be sold at any time, before the contract is due.

Exchanges

Exchanges are where commodities can be bought or sold. The largest exchanges in the United States are the Chicago Board of Trade which sells goods like corn, soybeans, and ethanol.

-The New York Mercantile Exchange trades oil, natural gas, and other precious metals.

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An option is a “contract” between a buyer and seller that gives the buyer a right to “purchase or sell a stock, bond, or other asset” at a specific price, within a certain time period…

The “writer” of the option (or seller) collects a payment (or premium) from the buyer, for this right. Buying or selling the asset at the specified price, is not mandatory. It is optional, hence the name. Option “contracts” can also be traded to other investors. They can be purchased on exchanges like the Chicago Board Options Exchange. Options were first created in the early 1970′s as a tool to hedge against losses, but have become more commonly used by speculators.

Speculators are very active in the options market, because options are a way that they can profit from “increased AND decreases” in stock, bond, or asset prices. Some consider options trading to be a risky form of investment, but they can also be used as an “insurance policy” to hedge against potential losses. Conservative or aggressive strategies can be used when trading these derivatives.

Option purchases are essentially a contact that give an investor the right to buy or sell 100 shares of a stock at a given price. In some cases, it can be a low risk way to enter the market. The options are usually inexpensive, when compared the the purchase of 100 shares of an actual stock.

For example, if a stock’s price is $100, an investor may buy the option to purchase 100 shares, for $150. If you were to buy 100 shares of a stock, that is trading at $100/share, it would cost $10,000. By purchasing the “option to buy” 100 shares, an investor can participate in any stock gains for the price of just $150. If your option is profitable, you can either purchase the stock or sell the “option” to another trader. Options are a great tool for investors because it allows them to profit, regardless of whether the market is going up or down.

Calls and Puts

There are 2 types of options, Calls and Puts. A “Call” gives an investor the right to purchase a stock at a particular price, during a particular time period. Investors are NOT obliged to make the purchase, but this “option contract” gives them the right. A “Put” gives them the right to sell a stock at a particular price, but they are not obliged to sell.

For Example, a “350 June Call Option” on Apple would give an investor the option to purchase Apple stock (which is currently trading at $390/share) at $350 per share until June.

- Puts, which are the opposite of a Call, allow investors the right to sell a stock at certain price.

For Example, a “400 May Put Option” on Apple would give an investor the option to sell Apple stock at $400/share, up until May. Since Apple stock is currently trading at $390/share, you would still be allowed to sell for the price of $400 for more than its value in the market.

Strike Price

The strike price is the amount (determined by your contract) in which you are allow to buy or sell the stock, when the option is exercised.

- For calls, the higher the strike price, the less expensive the option will be to purchase.

- The opposite is true for Puts, in that the higher the strike price, the more expensive the option becomes.

Strike prices are usually sold at intervals of $2.50, but can be sold in $5.00 or $10.00 intervals for stock that are in higher price ranges.

Hedging

Hedging is the act of creating a transaction, to protect against market losses. Hedges are designed to reduce your overall risk. They can be looked at as a form of insurance, but not necessarily in the traditional sense. Using one type of investment to hedge against another investment, means that you invest in 2 assets that have negative correlations.

- For Example, if you noticed that mining stock prices tended to lower in value as oil prices increased, you could say that they have a negative price correlation. This can be done with options, as a form of asset protection.

- “Protective Puts” are a type of hedge that can be used to reduce the risk of losses. For example, if a trader own Apple stock, but has concerns about the companies future, they might consider buying a “Put” to protect them in case there is a significant drop in Apple. stock.

Exotic Options

There are many different types of options that are dissimilar to the commonly traded options in America and Europe. They have differing rules depending on the type. Types of exotic options include: compound options, digital options, and one touch options.